Feb. 8 (Bloomberg) -- Demand Media Inc., an online company
that runs websites such as eHow.com and LiveStrong.com, fell 6.5
percent after a downgrade by Morgan Stanley.

Demand Media, based in Santa Monica, California, tumbled to
$5.93 at the close in New York. The stock has declined
11 percent this year. The company went public in January 2011,
selling 8.9 million shares at $17 each in an offering led by
Goldman Sachs Group Inc. and Morgan Stanley.

Scott Devitt, a Morgan Stanley analyst, lowered his rating
to “underweight” from “equal weight,” according to a note.
Changes to Google Inc.’s algorithms reduced Demand Media’s
visibility in search results, leading to a drop in unique
visitors, he wrote.

Demand Media began spending more on content late last year,
Devitt wrote. Citing less traffic and higher costs, the analyst
cut his estimate of annual revenue growth for 2012-2015 to 10
percent from 14 percent. Profit before interest, taxes,
depreciation and amortization is estimated to grow 12 percent a
year, down from 17 percent in a previous opinion.

Julie MacMedan, a spokeswoman for Demand Media, declined to
comment on the downgrade. The company is scheduled to report
earnings and its business update on Feb. 16, MacMedan said.

Some members of the company’s executive team also have
departed. Executive Vice President Larry Fitzgibbon left the
company effective Jan. 30, according to a filing with the
Securities and Exchange Commission last month. Executive vice
Presidents Joe Perez and Steven Kydd also left, MacMedan said.